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HSBC has admitted it regrets entering into the US subprime market after announcing a £12.5 billion rights issue.

The bank has coped better with the financial crisis than some of its rivals, which have had to seek bailouts from government.

However, HSBC said it has not been immune to events and is issuing the cash call to shore up its balance sheet to "respond to unforeseen events" as well as take advantage of acquisition opportunities.

Chairman Stephen Green said the bank is also winding up its US personal finance business, which it bought in 2003.

"HSBC has a reputation for telling it as it is. With the benefit of hindsight, this is an acquisition we wish we had not undertaken," Mr Green admitted.

Pre-tax profit for 2008 was $9.3 billion (£6.5 billion), down 62 per cent, triggered by huge losses in North America.

HSBC said the division lost $15.5 billion (£10.9 billion) over the year and the bank is dropping its HFC and Beneficial brands as a result.

In a candid statement on the bank's results, Mr Green said the banking industry has made many mistakes that have contributed to the current crisis.

He said: "Underlying all these events is a question about the culture and ethics of the industry.

"It is as if, too often, people had given up asking whether something was the right thing to do, and focused only whether it was legal and complied with the rules. The industry needs to recover a sense of what is right and suitable as a key impulse for doing business."

The bank will still be paying a final dividend, but decided to lower the payment for 2008 by 29 per cent, in dollar terms, from last year.

For 2009, HSBC has cut the first three interim dividends to $0.08 to reflect the rights issue and business conditions.

HSBC hopes the rights issue will raise $17.7 billion (£12.5 billion), which will be used to raise its tier 1 ratio so that the range will be from 7.5 per cent to ten per cent.